How is average total cost (ATC) calculated
A)ATC = (change in total cost) ÷ (change in quantity of output)
B)ATC = (change in total cost) ÷ (change in quantity of input)
C)ATC = total cost ÷ quantity of output
D)ATC = total fixed cost + total variable cost

Question

Quizplus · Accepted Answer

Average total cost (ATC) is calculated by dividing the total cost by the quantity of output. This calculation takes into account all costs associated with producing a certain quantity of output. Therefore, option C is the correct formula for calculating ATC. The other options are incorrect because they either do not include all costs or involve changes in inputs or outputs, which can lead to inaccuracies in ATC calculations.

How Is Average Total Cost (ATC) Calculated